A public power landmark -- and the battle to come

By marke

Created 05/26/2010 - 7:55am

CCA allows communities to offer an alternative — to buy cleaner power in bulk and resell it at comparable or cheaper rates to residents and businesses

EDITORIAL It's been 97 years since Congress passed a landmark law mandating public power in San Francisco, 67 years since the U.S. Supreme Court ruled that the city was violating the law by allowing Pacific Gas and Electric Co. to operate a private monopoly in town, and 42 years since the Guardian first broke the story of the Raker Act scandal and launched a campaign to bring public power to the city. And now, even operating under a tight PG&E-imposed deadline, the San Francisco is moving very close to establishing a modest type of public power.

Community choice aggregation (CCA) isn't what John Edward Raker and his supporters had in mind in 1913 when they allowed San Francisco to build a dam in Yosemite National Park, breaking John Muir's heart. The idea — which the city explicitly accepted in a formal written agreement — was to use the dam not just for water but for electricity, specifically to create a public power beachhead in Northern California that would prevent any private company, specifically PG&E, from getting control of the electricity grid.

CCA leaves PG&E's private grid in place and allows the investor-owned utility to continue to sell power in the region. But it also allows communities to offer an alternative — to buy cleaner power in bulk and resell it at comparable or cheaper rates to residents and businesses.

Since 2002, when the state Legislature passed a bill authorizing CCAs, the concept has slowly started to take hold. Marin County launched its CCA this spring. San Francisco last week reached an agreement with PowerChoice LLC, a vendor that will oversee the procurement of electricity, to begin service here, and the contract is headed to the SF Public Utilities Commission and the Board of Supervisors for approval.

That's a huge step forward for public power — but the city faces a tight deadline. PG&E has placed Proposition 16 on the June 8 ballot, which would require a two-thirds vote before any local agency could get into the electricity business. That's an almost impossible threshold (see: the state Legislature). Prop. 16 may still go down to defeat, despite PG&E's $45 million campaign to pass it.

But even if it passes, any existing agency — that is, any community that has its CCA in place before the election is certified — will be grandfathered in.

City Attorney Dennis Herrera argues, with good authority, that San Francisco is already protected from Prop. 16. The city already has taken enough steps to implement CCA (the implementation plan has been approved by the supervisors) that the inevitable lawsuit by PG&E will probably fail. But every step the city takes to bring the process closer to completion provides more protection, and the stakes could not be higher.

With CCA, the city will have control of its own energy future, be able to offer power that doesn't contribute to global warming — and be able, at long last, to take a step toward complying with the Raker Act. (And remember: the law says, and the Supreme Court confirmed, that the federal government can move at any time to seize the Hetch Hetchy dam and uproot the city's entire water system for failure to comply with the 1913 agreement.)

It seems almost certain that by June 8 the city will have a contract with a vendor and state certification that defines San Francisco as a CCA. Then, whatever the outcome of Prop. 16, the city needs to move forward with the program. And if PG&E sues to block it, then every official in San Francisco will have to be prepared to wage the legal and political battle of all time. PG&E can and probably will take the city to court — and the city can immediately start talking about breaking the 1930s-era franchise agreement that gives PG&E a low franchise fee in perpetuity, and enforcing the Raker Act, and taking the corrupt utility to task on every possible front.